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Thursday, November 17, 2011

Cox Communications abandons wireless service

Cox Communications said it will abandon its wireless service offering by next March, effectively killing a year-long experiment by the MSO to provide wireless as part of a quad-play bundle. The decision is another blow to cable companies' attempts to make inroads in the mobile market.

Cox said that starting today it will stop selling wireless service but continue to offer support. On March 30 Cox will discontinue the service. Earlier this year Cox abandoned plans to build its own wireless network and has been operating as an MVNO of Sprint Nextel (NYSE:S) since November 2010.

To help ease the transition to other carriers, Cox said all of its wireless customers will receive a $150 credit on their bill for every line of wireless phone service disconnected. The company said customers can keep their wireless devices and that all early termination fees will be waived.

In a statement, Cox said it was killing its wireless service for several reasons, including "the lack of wireless scale necessary to compete in the marketplace, the acceleration of competitive 4G networks as well as the inability to access iconic wireless devices." privately-held Cox never revealed how many wireless customers it had. The service was bundled with its other offerings and the company had launched wireless service in less than 50 percent of its total footprint. Cox said none of its other services, including TV and broadband, will be affected by the move.

Cox isn't the only cable company to fail to make inroads into the wireless market. Time Warner Cable and Comcast which are wholesale customers of Clearwire's (NASDAQ:CLWR) mobile WIMAX network, have repeatedly said that wireless has been an exceedingly small part of their overall business. Indeed, Time Warner has said that wireless demand is tepid at best.

It is unclear what will become of Cox's wireless spectrum. In 2006, Cox teamed with Comcast, Time Warner Cable and Sprint as the SpectrumCo joint venture to bid on AWS spectrum licenses during the FCC's Auction 66. (Sprint exited SpectrumCo in 2007.) SpectrumCo in 2006 spent $2.4 billion on licenses covering most of the populated areas of the United States. Then, in March 2008, Cox separately purchased around two dozen 700 MHz licenses in parts of Florida, Virginia, the southwest and elsewhere for $305 million as part of the FCC's 700 MHz spectrum auction, dubbed Auction 73.

In an interview with FierceWireless in June, Kelly Williams, Cox's vice president of wireless products and operations, said that having spectrum gives the company options other carriers without spectrum do not have." [S]o we're taking a look at a whole variety of potential approaches to providing 4G service," he said. "That being said, we're still really in the middle of a lot of discussions with a lot of different entities, and doing strategic work internally, so it's difficult for me to really comment beyond that. But [our] spectrum could play a role in how we bring 4G to market."

"We don't believe this decision has any new impact on our 700 MHz and our AWS spectrum. We remain in full compliance with FCC spectrum requirements," Cox spokesman Todd Smith told FierceWireless. "We understand the importance of wireless to the customer experience and are looking at several options to fulfill this need. We will share more information at a later date."